422: ‘A Monkey on a Rock’, With Stephen Hackett

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You can integrate in minutes and start shipping enterprise plans today. Go to WorkOS.com. WorkOS.com. No special slug, just WorkOS.com. And now, the show. I don't know how it's possible. There's only one person to blame, and it's me, that you have never been on this podcast before. Oh, well, thanks for having me. I'm glad to be here. Fun way to wind down the week.

Let me ask you this question, and I think you're going to know the answer. I'm sure everybody listening is familiar with your various work, but especially your home base of 512pixels.net. Where does the name 512 pixels come from? Yeah, so it's part of the resolution of the original Macintosh. That compact Mac line was 512 by 384 and wanted to honor that.

I was about to ask you this as a trivia question. Isn't it not 512 by 384? 512 by 384 is the magic 4 to 3 aspect ratio, but I was going to say this is like one of the trivia items that... I would think I would know, and I think everybody would think John Gruber would know, and that I've often gotten wrong over the years. Yeah, I mean, it's actually, I think, 3.42 now that I'm quite in the background. Yeah, it's a weird...

And I don't know the reason why. I thought you would have remembered this. But I always think... But the mistake that I make all the time, I always say 512x384 because I had so many 512x384 computers and I just happened to know that's 4-3 and for some odd reason the original Macintosh was...

slightly more widescreen than 4 to 3. I mean, that original Mac in particular was basically held together with, like, tape and luck. I mean, they really were squeezing every ounce they could out of the hardware, and so...

I don't know. Somewhere Syracuse is rolling over in his grave, but you can have him follow up. I thought you'd have it. You probably got one there behind you, right? I do. I do have one. It's on the shelf behind me. It was a Christmas present from a family member who didn't know what to get me one year. I don't know, I found this old computer, and I was like, oh, this is an original. Thank you. Yeah, they're cool, man. All computers should have handles. Yeah, they really should. Wow.

You never go wrong. Nobody ever complains when a computer has a handle. That's right. So you did it with the iPod. You beat me to linking to Dr. Drang's little back and forth that he and I have going on where I mentioned talking about old school Apple retail. and how it's like the claim chowder of all claim chowder. The prediction that Apple's initial foray into their own brand of retail stores would prove disastrous because they need their...

small independent resellers, which was the downside to them getting into the business, although some of them are still around. But more that if Gateway couldn't do it, what makes Apple think they could? And that they're going to piss off their good partners at Best Buy and Sears, Robeck and company. Yeah. Yeah. Where's Sears now? Yeah. It's funny. Growing up, there was a gateway store actually.

kind of around the corner from my parents' house. And I've got memories of like going in there and you can look at pictures online. Some of them, the early ones, were kind of themed like farms inside because their whole thing was like the cow print design on the boxes.

and yeah now apple retails it's usually in the top i don't know two or three like most valuable per square foot or something it's oh i think it's number one or at least the last time i looked at the numbers and they were and the only distant, like a somewhat distant second place was Tiffany, the jeweler. Jeez. I don't know how that quite gets computed. That feels like one of those numbers that there's...

It's sort of like the Bill of Materials, which it doesn't seem like that's as big of a thing anymore, but it would always be. A new iPhone would come out, and some analyst with analyst in his title, which makes the whole thing credible, of course, would come out and say that the entire bill of materials for the $700 iPhone 7 is $30.

Yeah. Oh, gosh. There was that whole cycle we all lived through for so many years. That would come out and then people are like, well, no, there's R&D and development. That's all built in. Yeah, that's okay. Yeah, that's all kind of died out. I think people got tired of that variety. Yeah, I don't know how they would compute the average retail. I mean, because Apple, I don't think, breaks out their own internal stores retail sales.

At least I don't recall Snell reporting that as a breakout number. That's right. I don't think it's a chart. And I also don't think Apple publishes what they pay for leasing, right? They're a secretive company, very good at negotiating and real estate. Especially very high-end retail real estate is like a cutthroat, secretive business. So I don't see how anybody could figure that out. But, you know, they're doing pretty well.

But anyway, I remember we had a chain. I think it was somewhat regional to the northeast. It was sort of like a proto-Best Buy, where you would go and buy any TVs, stereos, any kind of electronics, and it was called Silo. I think everybody had like a regional version of it. You can think back, you probably could, to like something that's like a Best Buy but was smaller than the cavernous size of a Best Buy. But Silo was weird.

because they had sort of a dark nightclub-y... vibe inside and i think when i was a kid i remember a lot of tv stores were very dark like in the same way that our coin-op arcades were dark And it's like, ah, let the screens really glow. And I remember they sold Macs for a few years at...

the absolute nadir of Apple's confusing product lines, right? When there was like a... I'm going to get the numbers wrong because, I mean, nobody at the time could remember them, but there was like a Performa... 7300 and a PowerPC 7310 and they were the same thing except that the Performa didn't have a cd tray and it's what and it's so they had a bunch of the performance and i'd go in and and i wasn't one of those types of mac

fanatics who would go in and fix the computers for free. There were. There were like community members who were so worried about Apple making it out of the 90s that they would like go into stores and they'd go on Usenet and say, I was at the such and such store and I went in and I updated the software. cleaned up the desktop but i would just go in and then max they would be in such a sad state i mean they just they look like like when a school

cleans out the computers at the end of the year and they're like, here's the ones that don't even work anymore. We'll just put them out back and see if some kids take them. And instead, they were the ones on sale in the store.

In Memphis, we had a couple of really good Apple authorized like resellers back in the day and we had an early apple store our apple store it was number 20 and so it was early on in the run but i remember going into those resellers and it's like they knew what they were talking about there was

Lots of software. I'm sure in reality it was like all the software that there was, I mean, when the Mac was small. But those guys really knew what they were doing, and then Apple Retail just ate them off the line. We still have one right here in Center City, Philly, and it's only three blocks from the Apple Store called Bundy Typewriter, which tells you how long.

They've been in business. I guess they've officially, I've just looked it up, but they've officially changed their name to Bundy Computer. They've made it. They're not what they used to be, but like when I was in college. If you needed something for the Mac locally, you'd go downtown, cross the river from Drexel, go to Bundy. And they were super knowledgeable. They really were. They were nerds. And now I think they stay in business because they're really good for repair.

And they're still officially authorized. So when you book a repair with Apple, you can... At times, I had like an old, really old MacBook Air, and the battery swelled up. And you'll appreciate this. I didn't want to just throw it out. I wanted to get it fixed. I do appreciate that. and even though I don't use it anymore, I haven't booted it since I got it fixed at Bundy, but I made the appointment, and it was like,

You could go to the Apple store and we'll fit you in, I don't know, three, four days from now. Or you could just go 30 minutes from now. You'd stop in at Bundy. And I went there. They do a good job of stuff like that. Anyway, Drang told a good story. Tell Drang's story. Yeah, so y'all were going back and forth about this, and he has a story on Lean Crew about going to a CompUSA, and he wanted to see if the G4 Cube, which famously didn't have a fan, that he just sort of came out of the top of it.

If it was actually hot and he put his hand over it and the machine immediately overheated and shut itself down. And he says he didn't touch it, that his hand was just, I guess, just hovering over it. But then every time he went in there afterwards, he would go in there and cause it to crash. Like a little... That little game of cat and mouse with a G4 cube.

I believe him because he seems like one of the most believable human beings walking the face of the planet. I never owned a G4 Cube, but I had seen them, and I don't recall them being that finicky. I always thought... But it makes me think that the ones in the store were already running hot because they were configured poorly and had stuff running in the background.

I think Drang's post leaves the impression that if you bought a G4 Cube and used it like a sensible Mac user, that if you put your hand over it, it would... It would crash, which is not true. It's like using the force, like you wave your hand over it, and the computer turns off. Alright, one last subject before like a pre-show subject is I... One of those weird things about this whole career that I have

is I thought, man, this would be great if I could make this work because then I will always be caught up on all of the tech news at all times because that would be my job. And that is very appealing to me. And... Somehow there is so much going on. I know almost nothing about what was announced at Google I.O. this year. Did you pay attention? Yeah, I watched most of it. And like most years, there's a lot of stuff that will probably never see the light of day or be killed off.

The vaporware to actual shipping product ratio is a little funny at IO. But it was interesting. A few days before IO, they did a stream that was all their Android stuff. They cleared out the Android announcement. before IO, and obviously that was because IO was going to... all the AI stuff, the whole thing. And so they've got new image and video generation stuff. Ars Technica had a piece today about, remember like the horrifying Will Smith spaghetti video from a few years ago?

Yeah, yeah. Which, I mean, if I close my eyes, I can see it. Like, it really is horrifying. They remade it in Google's new tools and a bunch of AI stuff, some for developers. I mean, they're all in, right? And they've got a new, I think potentially one of the most interesting things is they've got basically two tiers of paid service to use. kind of bigger and better versions of Gemini and Nobook LM and stuff. Including a really serious paid level. They've got one now that's like ChatGPT Pro.

Yeah, I don't know. I pay $20 a month for ChatGPT. Same. I know. And the other one, whatever the name of the other tier is, $200 a month. And I can imagine where if I start hitting limits, I would be like, well, maybe I have to pay more. But I never run into anything where I think, oh, you cut me off or something. I don't know. Yeah, same. But now Google has a $250 a month tier. Man, we're in the wrong business. We should just be making AI services.

But it's kind of weird for Google, right? Because Google's whole thing from day one has been everything they make is free if you're a consumer. Free with ads, eventually. Although for years, it was just free. I think there's two components to that for Google in particular. One, their ad business.

could be on the verge of being broken up depending on how their various court cases go in the U.S. And so maybe they're looking at a post-ad business or at least a business that's not So centered on ads. But also I think it speaks to how expensive this stuff is to run. I've been writing a lot about our local impact of that with XAI because XAI is in my hometown. and it's a huge investment, and so maybe it's also to help offset that. For Google, I think it's probably a little bit.

Yeah, because, again, I know I'm mixing up the companies here, but it all kind of meshes together. But one of the numbers that was thrown out when we talk about... the other IO of the week, which will be a bigger topic, but that chat GPT or open AI, I guess overall is expected as themselves have set the expectation that they're going to lose $44 billion. between now and 2029 or something like that.

I mean, I love, I've made the joke so many times over the years, a billionaire, and suddenly you're talking about real money. But that's just real money right off the, $44 billion is a lot of money for anybody. It's bananas. And I mean, Sam Altman and that team, they can raise money, right? Sometimes they're standing in the White House to do it, which is a different thing. But clearly they feel like they've got the runway to do that sort of thing.

And I guess that's the other thing about Google, like modern Google. One is the threat to the ad business. overall? And will it be spun out? Will it be broken off? Is that part of the thinking? And then the other thing is that with all of the Google Cloud stuff from, I don't know, probably going on a decade at this point. they've built a big chunk of their business or their...

selling software to corporations effectively, right? And so signing up for a $250 Gemini account isn't exactly... cloud computing at the corporate IT level, but it's more the same mindset where you're exchanging cash for access to the thing, right? Yeah. You don't get to touch the thing. They're not selling you a computer that runs Gemini. You just log in and use it, but they've gotten comfortable with charging money for stuff.

Yeah. I wonder sometimes if you roll back the clock at Google and they saw that this was the way things were going to go. Because I mean, for so long, I mean, I've used a free Gmail account for 20 something years. Same here. I've never paid for it, and I don't get tons of attachments, so it just keeps piling up, and they... Every once in a while, I guess they up how much. Note to Apple, every once in a while you can up the storage tier for users.

Five gigabyte is plenty, John. It's plenty. Do you think that'll come? Before I forget about it. Do you think that'll come at WWDC this year? It feels like if I were just wandering around inside of Apple, I would be looking for low-hanging fruit to make people happy. It's like... That fruit is scraping the ground. Yeah, yeah.

So who knows? What was the storage tier that they were stuck at for so long with iPhones as the minimum? Was it 8 or 16? I think 16 was a big deal, like in the 4S days. It's been a long time, but... And I think it was still... At 16, yeah, for a long time. Like one of the years where I had Phil Schiller as the guest on my live show at WWDC.

And I brought it up, and he had a good answer. Not like a satisfying answer, but a, ah, damn, you really talked your way out of that. Son of a bitch, you really are Phil Schiller. That's why he's been promoted to the roof or whatever.

But it was, give me the cheapest possible new iPhone. Was it 16? I'm pretty sure it was 16 for so long that we really did. A lot of us, I think, were like, I don't know. Maybe they're never going to. Maybe it's always going to be 16. And then, of course, it moved up. But the iCloud storage is a totally different. I mean, it's been five gigabytes from day one, which was, I don't know, what, 15 years ago? Yeah, 2011, I think. So yeah, it's been a long time.

Yeah, it's just never moved, which is kind of bananas. It has to be. I mean, I know they have more users, and I know that services is a long, complicated story financially, and that they want high margins for it. But very strange. I just looked in my iCloud Plus family group, so it's my wife and I and two of our three kids, and we are 1.9 terabytes. I was like... That's about where me, my wife, and son are. We're hovering. We're not dangerously close to two.

But something and I've got that whole I don't want to sidetrack this discussion, but I've got that whole situation with two Apple accounts. One that's my real Apple ID, one that's my iTunes ID that does the payment. And I know they announced the thing where you can merge them a couple of months ago. And that was another one that was like, hey, are they ever going to do this?

and they finally did it but I stared down the barrel of all of that and looked at and it seems like it went well for most people who tried it but I seriously got a dose of very mature, middle-aged, if it ain't broke, don't fix it, groups. Like, when I was younger... When I was younger, I would have waited 48 hours to see if anybody had a disaster, and then I would have whacked the button and thought, I'm sure it'll work out. And it probably would have worked out.

the current situation is It really is fine, but I think it is going to be somewhat complicated when I have to go past two terabytes to add another two terabyte, or maybe, and it might be that I get the two terabytes for free because I pay for Apple One. Okay, I'm going to go one step further down the rabbit hole, then we can back out. I went through it.

because of the storage issue. And it was, I couldn't merge them. And so I ended up basically making my purchase ID part of my iCloud family. So I named him Legacy Steven and his picture is in grayscale. And he's just in my iCloud family with all of his purchases. And it's like the ghost of my past Apple account. Wow, that's pretty clever. I wonder if I can do that. Anyway, because you can do that purchase sharing stuff, which is pretty cool.

It does seem, yeah, and that's why we have the family account. And I do have spots because at this point with a 21-year-old heading into his senior year of college, I'm pretty sure my wife and I are done having children. It's going to be an amazing surprise if we don't. All right, let me take a break here and thank our first sponsor. And this episode is sponsored by BetterHelp. Look, better help.

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H-E-L-P dot com slash talk show. My thanks to BetterHelp for sponsoring the show. I guess let's just move right on to the other I.O., right? I mean, how can we not? It's a big week for companies with two letters in their name. Yeah. I know. There's sort of a weird... fun cold war between OpenAI and Google that last year, or maybe for two or three years in a row, they've scheduled big announcements during Google's I.O. conference.

And I saw some people speculating that the name for this new company that's acquired and now within... OpenAI was a tweak over Google's previous quote-unquote ownership of IO from their developer conference. I think that's just purely coincidence. I think the timing... Definitely may not be coincidence, but I think the fact that Johnny Ive and his team at Love From named the company IO was purely coincidence. It's a good name. I like the name. It is a good name.

It is a good name, and I think it's, I mean, they, if you watch the video, right, they're looking at new ways for us to interface with our computers away from legacy products like... laptops and so yeah if they're looking to see how we could read reintegrate technology into our lives, it's a pretty good name from that angle. Yeah.

It's both the AI is currently, and I guess it is sort of, I mean, I don't know, maybe something can come after it, but it is ultimately the highest level of abstraction of computing, right? Like famously. Even the experts in the field admit that they don't fully understand how LLMs work. They just know that they do. You start with these algorithms and you... train them on massive, massive ocean-sized corpuses of data.

And then out comes a thing that'll start predicting natural language or start predicting pixels in an image based on the patterns that it gleaned from the thing. But how exactly it works, nobody really knows. It's very abstract. But input-output is sort of the further end of the spectrum. It's like the very beginning of computing, right? It's like looking at logic boards, right? Input-output signal or XOR gate.

and Gates, you're talking about the very basic levels of it. And I think it gets to what Johnny Ive recently talked about on his delightful and intriguing onstage interview with Patrick Collison from Stripe. Where I thought, Johnny, I very deftly... danced around his feelings about Apple today, five plus years after his departure. But I think part of it is his discomfort with the time that people spend on their phone.

Yeah, it's fascinating to me that that was one of the driving things behind the humane. pen too and i get the sense that maybe those two guys don't like each other very much but oh i i can i can say for sure or at least at least i know one of them doesn't like yeah one direction but that was part of their pitch too right we spend too much time on our screens we want something that's more ambient that you just

It's part of your life. It blends into the background more. And I think at the root of it, that's a compelling idea, whether something you wear or something that you have with you that... Talk some LLM. If that's the solution or not, I don't know. But it's above my pay grade.

I do resonate. I see it in my own life. I see it in my kids. I see it in other people's kids. We are addicted to these things. I do wonder if these folks who were there in the early days, if they were trying to kind of reconcile their feelings of responsibility over that maybe that's reading too much into it but i don't think it is with johnny ive in particular i i think he's i don't think i'm putting words in his mouth even i think if you look at the transcript of his interview with

Collison, he kind of comes out and says it to some degree, that he's maybe not guilty or feels complicit in doing something bad, but that at least he questions the role he played in getting to where we are. And I think the problematic nature of our society-wide addiction, let's call it what it is, to phones. The problematic side is when it...

very one way. It's not IO. It's not, the problem isn't like when you and I are texting each other like, hey, I'm going to be late to start the recording of the show and you're like, oh, okay, but you know, that sort of two-way communication. I think that's just been purely additive to the world. Texting in particular, Ben Thompson and I have been talking a lot about how... really take a step back. Chat is just a fantastic interface. It really is. It's not just fantastic for communicating.

one-on-one or in a small group it's it's fantastic for It's literally the only interface we have so far, really, for interacting with all of these AI systems. And it's also great for large groups, Slack. The whole Slack phenomenon is sort of based on the same fundamental interface. But I think that the problematic nature is more, I'm not just to throw TikTok singularly, TikTok, Instagram, but the sort of swipe, swipe, swipe, swipe, swipe, sort of stone face.

And there goes two hours. And what's in your head? Did you get any nourishment at all? Or have you been radicalized in some way that's bad for the world? Which happens on these platforms, right? I've been reading a lot about this as someone who's got a high school daughter.

truly the epidemic of body image and other issues that come from social media. I think the question, and clearly I think we know Johnny Ives' answer, but If that stuff is all bad and they're trying to right the ship steer the world back in a better direction a lot of people would look at AI and LLMs and say well that not the direction we should be steering that that comes with its own issues now they're very different issues right there's

where the data comes from, the power, the water, all of those things. And so it feels, I was thinking about this a lot this week, actually. In all the years I've paid attention to this stuff, this feels like the most... complicated thing to cover or talk about that i've ever had to do because everyone has feelings about it you can't not almost in modern life and It's only been things like ChatGPT. or Gemini AI tools on phones.

where i see like the normal people in my life or like family and friends who maybe they only ask me about tech when it's time to buy a new iphone like they're talking about these things because they're using them or they feel really bad about them it's just It feels like such a big, complicated topic, and God bless him, but Johnny Ive dove into the deep end this week. Yeah.

It is true. I mean, it's almost hard not to get a little philosophical about it, right? I mean, what else is big money investment going into these days, right? Go back to my youth and like the... the era portrayed on Halt and Catch Fire of the early PC and it was like Anybody with real money was like, what are you nerds talking about with these computers? I mean, here's $50,000 if you really want to go make a computer. I mean, nobody except the nerds who really were living it.

got the potential, right? And fast forward to the last few decades and look at like the top companies in the world by market cap and they're all computer companies or Berkshire Hathaway who's bought and sold tons of shares of of Apple and other computer companies in recent years. Right. And the Saudi oil company, there's one oil company left. But so in some ways, it's in some ways.

It's good for the world that the market cap monsters of the 90s, those ExxonMobiles and a bunch of other dig up fossilized dinosaur remains and burn it and pump the carbon in the air. profit that this is better but we've just come around to that all of this excitement is about these endeavors that involve massive amounts of energy.

And there are, I think that the knee jerk, hey, all of AI is bad because the energy consumption is too high and it's going to kill the planet is kind of silly because it's, I don't know, somebody's done some of the math where it's using chat GPT all day for one day is like... You know, like... taking or like if you take one fewer airplane flight in your life like you could use chat GPT all day every day for the rest of your life and come out ahead carbon wise something like that

I've heard a lot of that from my readers and listeners because I've been writing about XAI's. They have a giant site here in Memphis. They're building a second one. And I've been writing a lot about it because The utility company here is not ready for that yet. The amount of power they need, TVA and our local utility company, they don't have the juice yet for that.

And so they're using these big gas turbines, which are like the size of 18 wheelers, right? And that's caused a lot of concern in the community. So I've been writing about it on a really... local level i mean it's just different when it's in your backyard right and right problematic when you're pumping a bunch of gas into like the poor zip codes and and southwest southwest tennessee

We have to reconcile all that stuff, right? And I can, on one hand, use ChatGPT for some things in my life or in my work, but also be concerned about the pollution and all those things. And I feel like there's a lot of...

kind of one side or the other right now on this topic because it's such a big topic because it's so important but the reality is it's just it's really complicated and people are going to have feelings that sometimes even like conflict within themselves over it and that's that's okay Yeah, and there's something, something going on. And, like, Amazon...

Amazon is a tricky company. And like any of these giant companies, they're all unique in their own ways. They're as unique as people, largely because they're each so... obviously informed by their founders, right? That Apple is so Steve Jobs-y still and Microsoft is so Bill Gates-y still and Amazon is still so Jeff Bezos-y. But there was something weird about the way Amazon got off the ground, or unprecedented, where they weren't turning a profit. But every few quarters when

investors would get antsy about that, they'd turn a little bit of a profit just to show that they could do it if they would. And they kept telling them the reason we're not turning a profit even though we could, is we think we should be pumping all of the money that we could book as profit into continuing to build out our infrastructure. And now it's been a while since Apple or since Amazon wasn't profitable. Now they are very profitable. And what they told investors was right.

stick with us, we will be profitable, but we're going to build out an infrastructure that will give us a dominant position. And all of that was true. including the fact that they've built out a dominant position that nobody can catch up on because nobody else can afford to do that. I mean, Walmart a little. But like when you kind of dwarf Walmart's ability to spend with you on building out infrastructure.

You've reached a really dominant position because Walmart was like, hey, that's our game, squeezing out the little retailers. don't take that from us yeah and the amazon story i mean it's so brilliant right they built the tools they needed and then built the tools like relay stuff like we run on aws or like it is They took their technology and productized it in a way that is so fascinating. And I think that's the term we're starting to see with these AI companies a little bit, right?

They built tools to build the tools, and they built tools for nerdy people. But now, like the ChatGBT app, it's just on your phone, right? it's there's still lots of rough edges when it comes to it being a product right like my word if all Johnny Ive does is fix their naming of their models and like he's worth the six billion or whatever it is uh But we're seeing that turn now, right, from, yeah, they're still bleeding money, a bunch of these companies are.

But they are starting to make the turn into we're making products for regular people. And that's when it gets interesting. And that's where I feel like the lesson, it's a yada, yada, yada, Amazon proved you could lose money for a long time and build a dominant position and then make lots of money forever. And I feel like that's where... The mania is coming. How can it even be that it's even plausible that a company could say, oh, yeah, we expect to lose $44 billion over the next five years?

Try going back 40 years and explaining to somebody back then that that and even take the inflation out of it right deflate the numbers to 1985 numbers or something it's still they would be like well what kind of a nut nobody who Anybody who would invest in this is a lunatic, and they don't have money because they're lunatics. So where is this going to come from? This doesn't even make sense. And instead, it's actually the way everybody thinks. And eventually...

The bills come due, right? Eventually, you have to turn a profit. And the question is, who's left when that happens? I don't know. It won't be all of them, I don't think. I mean, there... I think OpenAI is, in many ways, the dominant player, but there are lots of other interesting companies. I know Federico has talked a lot about what Anthropics is up to. He's paid closer attention to them than I have, but it is.

It is a race, and at some point they'll have to kind of mature into what we think of as a sustainable. business but man part of me feels so allergic to it like thinking about when we started our company is like we didn't lose money at all i was like we were going to make money we're going to have to go back to our jobs right it wasn't an option it's not an option for normal people Right, there is to me a sort of

Ick factor to a business strategy that's lose a ton of money for a long while and something, something will happen. And it's like, I can see it. I think that the path to that though is by somehow. Dad. It causes a lot of destruction along the way, and that's what carves the path out for profitability. And it was with Amazon and retail, it was that Amazon got effectively...

de facto permission from investors, the people who owned its publicly held stock after they went public, that we don't expect you to turn a profit for quite a few years. We're with you on it. And no other company had that kind of permission from their ownership, whether they were private or public. And it gave them... it's a very subtle thing that Bezos pulled off there but it was genius it led to less competition. I don't think it was In the pre-internet world,

The position that Amazon holds in retail, it's almost unfathomable. I mean, there were Kmarts and Walmart, of course, has been around since I think the 50s or 60s.

go back to earlier in the show Sears Roebuck right big company big part of people's lives and I guess was sort of the proto Amazon with their catalog which was the way that people could buy stuff from a major... even when they lived in the middle of nowhere, somewhere in the middle of the United States, because you'd get the Sears catalog once or twice a year, and you could buy everything that was in a Sears, even though you lived 500 miles away from Chicago or something like that.

I mean, they did mail order homes. Like, I need a house. Can you ship me all the parts for a house? I mean... In the 30s or 40s, it's wild. Yeah, and everybody knew them. I mean, even when I was a little kid, it was still a cool store to go to. And it was kind of cool because they sold, like, everything. They had a whole hardware store within the store, like a real hardware store.

Yeah, it was Craftsman Tools. And they sold appliances, TVs, lots of clothes. I mean, I used to get lots of my back-to-school clothes at Sears, no doubt about it. A shoe store, a whole shoe store. It was a real department store. But sort of never, it just never would have possibly, there was no imaginable way that, everybody knew it, but there's no way that it would be as ubiquitous as Amazon.

Right. I mean, my wife and I try not to buy stuff at Amazon a little. We both think sort of just fuck Jeff Bezos and with the whole Washington Post thing. But, you know, if you can think of a way to buy something somewhere else first, we do. We're not protesting. We don't. But we still get Amazon stuff all the time, even trying to go elsewhere.

We get Amazon stuff all the time because there's so much stuff that you just can't get anywhere else. Or I can't figure out an easy way to get it somewhere else. Right. Yeah, no, it's huge. I mean, they saw that opportunity. To your point, they were given permission to chase it. I had not really linked in my mind Amazon's route to where they are now to what OpenAI could be doing, but...

It is interesting to consider if there's a next Amazon, who is it? OpenAI would be on my list in terms of importance and value down the road. Yeah, and building out an infrastructure that it turns out nobody else can catch, maybe. So what do you think? Well, number one, before we go to what they're building, I don't, I'm going to say it. I said it on dithering. I'll say it again here. I don't like the lowercase IO. I really don't.

At least they're consistent. Something I think you and I both pointed out that on Humane's website when they launched, it was like capitalized in different ways on different pages. Oh, yeah, yeah. Sloppy. So at least it's consistent. So I'll give them a point for that.

But yeah, I really think Google's, I think they've stylized it differently now, but I think for a long time it was capital I and then a slash and a capital O. And that was cool because to your point earlier, it felt old school. Like it felt like I'm doing toggle switches. on some old computer. But, you know, Johnny Ivey can't escape the lowercase vowels. He just, the man loves it.

But, you know, they did walk away from, they know, when they first launched Love From, they were trying to get people to spell, you know how Yahoo always tried to spell their name with a bang at the end? Yeah. Love From was trying to do that with a comma. Do you remember that? Makes no sense. But they've walked away from that. They've come to their senses. You can't just

pretend that your name has a comma at the end because it's going to interrupt the flow of every single sentence your name appears in. It looks like it's still the title of their webpage, but once you dig in, they've dropped it. Yeah, someone tapped them on the shoulder and be like... You're impossible to write about. Please change this. I'm trying to think what would be more annoying if you could...

legally insist and force everybody to include a punctuation character in your name. What would be worse than a comma at the end? I mean, the comma's pretty bad. I mean, they're close, right? But a semicolon, I think, would also be complicated, mostly because most people don't know how to use them. But yeah, the comma may be the worst one. It's pretty bad. What if you tried to start your name with an open parentheses, but you don't have a closed parentheses in your name?

How about that? You can break every webpage in existence. Yeah, or like an open angle. Break it. why doesn't this html render oh you wrote about that company again so all right let's give them a pass and i'm going to style it capital i capital o on daring fireball because that's the other thing when i Don't go with a company styling of their name, spelling.

Then there's the, well, then what do I do, right? So famously, or at least famously in our circles, I spell Mac OS with a capital M. And my rule, but I spell iOS with a lowercase i. And my rule is if you say the letters out loud, you're allowed to have a lowercase one at the beginning. So you don't say M-A-C-O-S, you say Mac OS. So that's a real name. You have to capitalize the first letter.

iOS, though, you just say it, so lowercase i. tvOS, you say them, so fine. Lowercase t, lowercase v, capital O, capital S. But if that's my rule, then I guess I should be spelling IO lowercase. But I feel like I have to add to the rule, which now it suddenly feels like I'm a Trump judge. Right. A Trump justice on the Supreme Court trying to

backwards engineer a way to sign a thing that says, yes, I think the President of the United States has legal immunity from all crimes he may commit while in office. Now I want to add a rule. that you can start with some lowercase letters if they're pronounced letter by letter, but you've still got to have some uppercase letters in there. Yeah.

And they can't spell it lowercase I, capital O, because then it would look like iOS. Yeah. Do you have a document somewhere of your style guide? Yeah, yeah. It's online. Yeah. Okay. So I've got one. It's just an Apple notes because sometimes I forget how I stylize things. And I wrote one for our friend underscore because he was just like capitalizing stuff all over the place. I was like, okay, buddy, I got some rules here.

But, yeah, you've got to pick a style and stick with it. It can be different. I'm texting you now. It's a text document. You'll enjoy it. I link to it every once in a while. Yeah, it's not secret. It is public. It is not HTML. It's just a text file and a sort of... Jesus is the second injury. Yes, there's

Quite a few. If you read the whole, don't start reading it now. No, I'm not. It's a bunch of rabbit holes. But a lot of the entries are very dated. And sometimes when I'm adding a new one and I look above, And it's something that really I haven't written about since 2006. I'm like, should I take that out? And then I'm like, nah, why should I take it out? It's kind of fun that it's there. It's not hurting anybody. It's not hurting my search ability. You mentioned it. The humane thing is

To me, the knee-jerk refutation of, hey, why is everybody excited about this IO thing with Love From and OpenAI? Isn't this just humane and maybe with a little bit more money? What are they possibly building? And isn't it the same folly of thinking that people even want to move past their phone? Yeah, I'm super conflicted on that because people really do like their phones, right? Including both of us. But, yeah, I mean, Humane, I think, failed for a bunch of reasons.

the second someone was like, yes, laser projectors are in the future, then they probably lost, right? Like that, that was the moment maybe. But it is hard, I think, just because we're so used to interacting with things with screens. Because once you got past, like, the Altair, right? Once we had even a DOS prompt. Screens have been the way computers talk to us, generally, mostly for most people. And even before that, the teletype was sort of a screen that just was printed on paper.

Yeah. And just sort of kept scrolling. Right. That's a lot of history to break away from. And maybe these are the guys to do it. Maybe not. Maybe AI is what we needed to move past that. Maybe it's not. I don't know. I do share your enthusiasm about just seeing what it is. Because, I mean, Johnny Ive did make some of the most incredible products that the world has ever seen. Also made some...

Weird ones that maybe shouldn't have left the lab, but very clearly the most important product designer of our time. What do you think is one of the weird ones that shouldn't have left the lab? The iPod shuffle with no buttons. It's pretty high on my list. And I think...

I've been talking recently for, I forget why, but it's come up on a couple of podcasts. I've been on the fat nano, the fat, fat iPad nano, which to me is a really interesting one. And I'll put a link. Where's my notebook here? Put a link in the show notes. People probably forget this one, but they had the iPad in there.

Or iPod Nano, right? Or they had the iPod Mini, which was a big hit because it was so much smaller, seemed so much smaller than the bigger hard drive, traditional, original iPod size. And the iPod Mini was really taking off and its sales are going up all the time. And then they threw it away and said, nope, we're getting rid of the most popular iPod and we're coming out with the iPod Nano, which is going to switch from tiny little hard drives to flat. And so there was a cut in price per store.

But I think they rightfully figured, and probably with data, that, hey, people don't have, like, one gigabyte is fine. They don't need five gigabytes. for almost everybody out there, like a one gigabyte or two gigabyte of MP3 files. And compression had gotten better in the intervening years because everybody was listening to compress. AAC files and MP3 files.

And so they had this original Nano, super, even a bigger head. Everybody's like, this is perfect. And it was sort of, what would you call it? Like a... stick yeah okay it was amazing i mean right it was mind-blowing at the time and then one year it was like 2011 or 2010 20 not 2009 i forget they came out with the fat nano which was more like a square So everybody, word moment.

But directionally, the idea behind the fatness... So they only did it for a year. It wasn't a hit. They went back to the other size. But directionally... They were spot on exactly right, which was, hey, people want to watch video on a little thing in their hands. Yeah. Right. And it sort of gets to what Johnny Ive maybe has some guilt and regret over. Right. That they've.

maybe underestimated just how badly people and how much time they would spend watching video. And so they made a device that was optimized for video widescreen rather than... horizontal I think what they got wrong with that design clearly if you just watch the way people use their phones is not just thinking hey just hold the device side

Yeah. I mean, to the point that my iPhone is almost always rotationally If I'm watching a video, it's in YouTube, and they have a player that will go horizontal. But the rest of the world has moved on to vertical video because that's how we hold our phones. The idea of turning my phone over 90 degrees, no, no thank you. I can't be bothered to do that. The no-button shuffle that you mentioned, that's an interesting one because I wonder how much that informs what they're building at IO.

Right? I mean, vastly more complicated than something that only played audio through a wired headphone connection. But I could see that sort of being the thing. But then again, then why did they hire all these? new eye designers and stuff I don't know yeah who knows I mean it is I think the biggest mystery in Silicon Valley now is like what are they doing and And whether or not it's successful or not, it'll be very, very interesting to see what it is and their explanation behind the decisions.

They made, because you know they're going to do that, right? There's going to be a whole thing about every little detail about it, because it's Johnny Ive, and that's what he loves. And so it'll be a fun day when that ships. Now, will it be a fun day for them six months later? Are they selling a bunch of them? Man, I just don't know. I think one of the ways that Humane went wrong was, I think fundamentally it was hubris.

at a very almost profound level. And part of that hubris was that their original marketing, like a year in advance of shipping, or maybe even more, I forget when they first started, Putting out the bizarre teaser video. You know, like the one where the lady was staring into the eclipse? Yeah. Everybody except the current president of the United States knows that you don't stare into an eclipse. I forgot about that and then saw a gif of it the other day where he's pointing at the sun and just...

Oh my gosh. What are we doing? I know, but Humane made a video about some woman and she was like in a sea of people staring at their phones and she noticed there's a solar eclipse going on and so she stares at it. There go your retinas. I don't know. I think... They somehow had the hubris of thinking that they were building a replacement for the phone, which wasn't going to happen.

Sam Altman has spoken, and I forget where, because they made the video and he did some interviews and there was some reporting on what he told the team. But either in one place or in multiple places, Sam Altman has said this week, now that they've decloaked with IO, That they see what they're building as, you know, in the same way that the phone didn't replace laptops and that we all still have laptops, but we also still have phones. This will be to the phone what the phone was to the laptop.

Sounds plausible to me. Like, I still don't know what that device is, but that sounds reasonable to me. Like, the phone isn't going anywhere, right? But it maybe, eventually, it has to, at some point, become less important. That something is going to do to the phone what the phone did to the laptop. So I think there's an advantage. But I think...

And I only really thought, I didn't really think all the snark that I've written at Humane's expense over the years, One thing that never really hit me until this week, thinking about this partnership,

is that their AI sucked anyway, right? It wasn't their AI. I mean, what were they using, OpenAI? I don't even know who their partner was. They were, and I think if my timeline is right in my head, humane came out of the shadows before the chat gpt moment and i think some people including me like we had that question in our minds of like how far along were you before you settled on

open ai helping you power this like was your plan to do it all in-house or did you just like bolt ai onto this product that was going to do something else i do not know the answer to that but it wasn't their own technology they definitely didn't Yeah. And so I think that the profound difference here is obviously this new endeavor is truly a partnership by all accounts, right? And so it's going to be like the full... Power of open AI.

doing the AI for the device, not just, oh, here's what you can pay and get through an API bill or just a regular account. And So I think, if I had to guess, that it is... Putting aside speculation on what shape the device will be, and will it be like a pendant you wear around your neck, or is it, I really doubt it's going to be a pin. But is it a watch? Is it a little rectangle? Is it something that you carry around or something you wear? Put aside those questions.

I think what they, Johnny Ive and Sam Altman seem to be hinting at, but don't want to come out and say is, That it is. a much grander ambition for the actual AI itself. than going from ChatGPT 3 to ChatGPT 4 and going from ChatGPT 4 to 4.1. I don't think it's ChatGPT. And the closest, I think, Altman came to dropping a hint about that this week. was talking about current AI being in the equivalent of the terminal era. Yeah.

and that they want to build the GUI for the AI age, and that this will be like the Macintosh, what the Macintosh was to the terminal command line character-based computers that came before it. And saying that when your partner is Johnny Ive, he knows what he's saying. Not that Ive was there at the original Macintosh, but he was... He's the person people think of when they think of Apple hardware. Right.

It's a huge claim, right? But he's not wrong in that, yeah, if I'm going to use ChatGPT, I'm opening the Mac app or I'm opening the app on my phone or maybe I'm using a web browser, right? And even with the Mac, where there's a lot of integration with different applications now, which I think is actually pretty cool in some situations. Even that feels like new technology kind of living within the frame of old technology in a way.

and at some point it's going to potentially break free of that, and I think that's what they're trying to do. The other thing in their shared history, I keep thinking about Johnny Ives' role. I mean, who knows how much effort he put into it, but that he supposedly informed or hinted. or suggested aspects of Eve, the robot, and Wally. Mm-hmm. And that sort of... Eve certainly looks and feels very Johnny Ivey, right? Even the color, right? This white and black.

shiny, clean, perfect thing and the beeps and boops she communicates with and the way she moves and the fact that I'm calling her she and not it. I could see him aspiring to build a gadget. that you become attached to in the same way that you would imagine if you owned a real working WALL-E, if WALL-E could be made real and put Roomba out of business.

that you would feel affection to WALL-E. It's one of my favorite movies, not just Pixar movies, but one of my favorite movies, period, ever made. I think it's just an astonishing cinematic achievement. But one of them is just how much of a character that robot is and how much emotion it has. It carries. My kid's named Arumba, right? People have that with their technology, right? His name is Charlie, and he goes around the house.

Yeah, people have that, right? Like the Roomba is like, and I've got a pretty decent one, but it's still basically just like bouncing around my house and will like run over a thing of ribbon that my daughter left out and try to...

choke itself right like it's not an intelligent thing so take those feelings that we have towards technology now and then you pair them with something that knows you and you communicate with And that is extremely powerful, kind of scary in some ways for some people, I think, but... You could see people like Sam Altman and Johnny Ive being attracted to that idea. We're going to make something that is more of a companion than anything we've had in technology so far. Yeah. I think companion...

was the word I used on Dithering's episode that aired this morning. But yeah, I'm glad you said it, because that's my guess. I don't know. Nobody's told me that. But something that's more of a companion. And then, it's sort of a sick way of looking at it, but the better... The thing is, the more risky and uncertain the eventual outcomes of it will be, right? It's the fact that the iPhone was so spectacularly amazing that here we are.

18 years later talking about how it's too addictive, right? And so you can certainly imagine if they pull it off and make something that's more of a companion. that you talk to throughout the day that gives you companionship that it could maybe not be so good for a lot of people. Yeah. I mean, there's definitely people who have unhealthy relationships with the chat.

gpt etc as they are today you know there was the guy at google who a couple years ago before these things became public who was working with an early version of what i guess became gemini Remember, there was a story that the guy became convinced that it was sentient and that he felt like it's not a human right, it's like an intelligence right activist, that it was immoral for the company to... to have created this thing and trapped it within the system.

It's wrong. It's really just like sort of a complicated regular expression system that just predicts patterns that come out. But it already even years ago created the very convincing illusion of being real and imagine what something really good along those lines that you talk to and that beeps and boops at you in truly appealing ways you know how I was going to say corrupting, but I don't know what the word is. I think it's confusing to some people. Right, and

You can see the outcome of that. There was a story a few days ago about users have uploaded pictures of people to Grok and asked Grok to undress them. It's like, that is... wholly inappropriate at every single level I can think of. But people are doing it out of lots of terrible reasons. And so there is a danger to that sort of technology, I think, for a lot of people. But then I also think about something I read recently about hearing loss.

Maybe it was in conjunction with some Apple hearing aid stuff. I don't remember, but... There's evidence that people with hearing loss are more prone to things like dementia because they don't hear words utterly. And so you could also see that technology like this, could be helpful to people who live alone or who are elderly

There's upsides and downsides to all of it, right? And it's up to product people like John Hive and Sam Altman and this team they've put together to navigate those things and to take, I think, the rough edges off of them. And then we'll see what the people do with it. We'll see what humans do with it once it's out. But I watched that video and read a bunch of the same stuff you did, I'm sure. When I walked away from it all, I was like,

These guys, they're doing something really weighty in a way that we haven't seen out of Silicon Valley or San Francisco. Those guys really love San Francisco. It was like a whole section of the video. Which is not how I feel about San Francisco personally, but this is my taste. But their San Francisco, as pictured in the video, does not smell like the San Francisco that I have experienced. Although I do love the city of San Francisco and consider it one of my favorite places in the world.

maybe uh over the years at wwc's and stuff i was like seeing some things i can't unsee but i'm also living my hometown so take that for what it's worth But they're doing something really weighty, and obviously they think it's important, and I think to the world it's important probably, but... It's weighty in a sense that we haven't seen from Silicon Valley or from these companies.

Maybe since the iPhone? Yeah, I don't think so. Meta's made some glasses. But they're glasses so far. They're not real. I mean, I'm not saying they're not real and people don't enjoy taking pictures with them. But they're not a real attempt to... make a computer, right? Vision Pro, maybe. I know people think it's a historic flop, and I think the jury...

I think we need to see the next few generations before you can make that judgment. Vision Pro might be something as ambitious as what they're doing, but maybe in the wrong way in terms of actually being something. that really makes people just die to use it. And the computer history is littered with the corpses of products and companies.

that didn't make it but we're on the right track right humane joins the list of companies i know y'all spoke about this on tethering general magic right yeah or or even going back to the the hot and catch fire days right For every one company whose name people remember like Commodore. There were a whole bunch of companies that you will never come across on the modern internet because they live and died in such a short period of time. They made no impression on the modern world.

And so these guys, they're entering that level of intensity, I think. And I don't... My money is on them not being the next humane AI pen if they have anything to say about it. I think they're taking it super seriously and And hopefully taking all those like secure safety and societal concerns at the same level as what's the finish like on the clip. Those things deserve equal weight, if not one more than the other in these conversations.

Right. You know, the last thing is it really is an amazing lineup of talent. just the names that are already publicly known, let alone some of the ones that I know aren't publicly known, but Evan Tankey and Tang Tan and Mike Mattis. Oh, I don't know. Is it IO? But is it Love From? A whole bunch of the people who we know who helped build the iPhone and iPad and great stuff from the last 20 years are now working on this.

I'm not saying there's not tons of talent still at Apple right now, including younger talent and stuff, but I can't think of names like theirs, right? And it's part of Apple's... what's the word anonymity within the ranks that the only people as the years go on after Steve Jobs has died We know fewer and fewer of the people making things at Apple who aren't the executives on the senior leadership page.

Yeah, I mean, I think in some areas that's true. I'm thinking about like keynotes in recent years. We're seeing more people like, oh, this person's involved with health or with Apple Pay or something. And that's great. Like they should have more faces, more diverse keynotes.

excellent i think where the difference is though is that we know the name of johnny ives johnny ive and his lieutenants because at the time apple had design at a higher level both i think organizationally but also sort of in the way they talk about things than they do now right i think about like in 2000

2008 they they did the unibody macbook pro and johnny ive is on stage at town hall talking about oh like we used to make this with a bunch of little parts we screw together and now we're carving it off aluminum right it's a fascinating video people can go find it on youtube It was a whole keynote about this is how we build our laptops and that sort of highlighting or spotlighting the design process.

We still see it from Apple sometimes, right? The Vision Pro announcement a couple years ago had quite a bit of that, but... it's in line with all these other things where it used to be more on a pedestal, I think. And that's an interesting change that I think has taken place over the years.

And maybe not just design, either. I think back to some of the Phil Schiller-led iPhone keynotes where he'd really sort of nerd out on subpixels in a very, hey, it's not going to take more than 90 seconds, maybe two minutes tops, but here's Phil Schiller who really knows his shit about photography. Giving you the lowdown on a legit breakdown in sensor technology that allows this tiny little iPhone camera to shoot a lot better photos than last year.

or maybe another, like the unibody example is so great because you're right, the whole video was really just, here's how we make laptops.

Yeah, it's wild. Steve Jobs did some of that. I'm trying to think of some Steve Jobs examples, but there were times where Steve Jobs would just want to nerd out on... on something like hey by the way we got this his little I just linked to it his little mini lecture on what a retina display was was great that's not maybe not the best example but yeah sometimes they would just nerd out on this and yeah

I don't know who those people are anymore. Who's the Mike Mattis who makes the slider, the slide to unlock slider, look so good that you just want a slide to unlock just to actually just watch it go across the screen? Who? It's someone in our friend group. Is it Guy who had a phone and that's all he could do with it? Yeah, I think so. Yeah, it's because he was talking about it.

Yeah, because he was from Canada and couldn't get his SIM card to work in it because it was U.S. only. He had an iPhone that had no cell service and he would just slide to unlock. sort of figure out, try to figure out how the animation algorithm was working, that it was tracking his fingers so perfectly. And there are people, you know, The folks who think it's time for change at Apple and the high rank.

They would look at that part of our conversation or that change over time and be like, well, it's because Tim Cook's not a product guy. He's not a design guy. I don't know exactly where you come down on that debate, but it is clearly a different. from the jobs era to now, that those things aren't given the time, at least in public, that they once were.

I have a draft that I should, maybe by mentioning it here on the show with you, it'll force me to finish it up and get it out over the weekend. But basically where I fall on that is I don't think... I don't really think it's worth spending that much time... arguing about whether it's time for Tim Cook to retire or step upstairs to chairman of the board or something, because it's not going to happen anytime. It's fan fiction. And I know that's...

I'm not accusing Syracuse of having done that because he didn't really call for Cook to be asked to retire by the board. I think fairly encompassing encapsulating his argument is just I think Apple really needs to do X, Y, and Z, or kind of needed to already, but the sooner they've changed their mind on X, Y, and Z, the better.

and they're not going to do X, Y, or Z so long as Tim Cook is still the CEO. And I think that's why his essay hit very well, because it wasn't a polemic. It wasn't saying, this guy should be canned, he's a bozo, get rid of him.

So I don't disagree with him. I just don't think it's worth thinking about that much. What I think is, I think Tim Cook is a man who has shown that he can change his mind on very profound... topics and I think he needs to on a few of those at least x y or z at this point so what I would like to see from Tim Cook And again, I've been down a nostalgia streak of late at Daring Fireball, but I reread Steve Jobs' Thoughts on Flash, which was so much longer than I read. I've read it like ten times.

But every time I read it, I'm like, wow, this is a lot longer than I remember. And I think because Thoughts on Music was so much shorter. Thoughts on Music really wasn't a very long essay because it wasn't that complicated. But Thoughts on Flash It's like six points. He's like point and six. And it doesn't get too complicated. He was such a great writer, and when he had figured something out, he was terrific at explaining it. I would like to see Tim Cook write thoughts on the app. That's right.

It would be really good for him to do that. And I agree with you. He's not going to go anywhere. I think if the election had gone differently, maybe he'd be looking at retiring sooner. But I think as long as Trump's in office. Cook feels like a personal obligation to be there because he... Can't somewhat manage the chaos. Do you ever do this? I do this. It happens to me all the time where I'll start. I started linking to Syracuse's essay and then I started my own commentary.

And it kept growing and growing. And I thought, what am I doing here? I really wanted to just link to it and quote a little bit of it and just encourage everybody to go read it and let it speak for itself. And so I cut all of the stuff I had written and have it in a different draft now. Do you do that?

Oh, yeah. Do your link posts ever start spiraling? You're like, what am I doing? Is it a link post or is it a full article? Oh, I know. Yeah. Sometimes I just stare at Mars at it and the little field that has the link list item is like...

Is that? Which one of these is this? Yes, you know, sometimes I'll even end up switching it after the fact because I'm like, that was too long to be a linked list item. But I think I cut this part too because I think I was like, you know what, I should take all these points out. But I even included...

that part in the folly of thinking that tim cook might go anytime soon that i i also think it's not just that what tim cook thinks about his obligations to apple politically in the world right now with Trump in America, Xi Jinping in China, and the threat to TSMC in all of Taiwan. I also think it literally is the biggest problem that faces Apple right now. We'll actually come to that after the break, after I thank the next sponsor, but...

That as much as developer relations in general is, I think, problematic for Apple and growing and getting worse because they seem to be not seeing it. My response to that is, even if they're right, this is my response to anybody at Apple who thinks that they have an overall correct stance on developer relations. Even if Apple is right about that,

It's almost undeniable. I don't see how anybody could deny that the developers in the outside world do not see it that way. So even if Apple's right, they're wrong because developers think they're wrong. And they're not... poor, right? They're not losing money. They're in a position where they can be magnanimous. And even if they're like, well, we don't think we should have to do this. We actually think 70-30 is extremely fair.

for what everybody's getting. Just to name one particular issue, right? Right. The most obvious thing they could just change at the snap of a finger is the commission rate. Even if they really do feel in their bones that this is just and fair and if omnipotent Solomon-like deity could come, whose judgment everybody would say, oh, this deity is always correct. And the deity looked at the situation and said,

70-30 is exactly fair. And all of us would be like, son of a bitch. And by tomorrow, all developers would be like, nah, that's not right. There's no way to, even if it is the correct fair

commission, there's no way to convince everybody outside the company that it is. So that would be my message there. All right, let me take this break and thank, before we spiral out of control, our good friends at Squarespace. This podcast is sponsored as episodes of the show often are by our good friends at Squarespace. Squarespace is the all-in-one platform for making your own website, and they have been around for a while at this point.

And they've been sponsoring the show for a long time. And they keep evolving their platform in new ways. And one of the big new ways that they've got in the last year or so is design intelligence. Design intelligence from Squarespace combines two decades of their industry-leading design expertise and design tools.

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But it's really by using AI for this. And if you're using AI to do lots of other things, making images and writing text and just coming up with ideas and... You can actually use AI to help design almost part some new section of your Squarespace website. It's really powerful. And their users are really, the more they try it, the more they really like it. Another thing, Squarespace payments. Squarespace payments is the easiest way to manage payments in one place with Squarespace.

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Go to squarespace.com, you get a free trial, and when you're ready to launch, go to squarespace.com slash talkshow, and you will save 10% off your first order of a website or domain. Squarespace.com slash talkshow. And just remember that code talkshow to save 10%. So you ready for a USA-made iPhone, Stephen? I'm saving up now because It's gonna be. Oh man.

Letterman used to have this phrase, or he still has it, I'm sure, but he just talks. I don't even know what the hell it means, but I know Snell loves it too. But I wouldn't trade Tim Cook's Trump problems to a monkey on a rock. No. We were talking earlier about if you wind the clock back. Imagine like Tim Cook, a young Tim Cook gets a call from Steve Jobs. He's at

Tim Cook, was that Compaq, I think? Yeah, Compaq. Hey, come fix our inventory problems. And now he's like holding the world economy in his hands. So how did I get here? How did this happen? But yeah, I know a few days ago, because one thing Apple's been doing is they've been trying to move some of their supply chain stuff out of China and diversify, right? India has been...

Kind of the top of the list, I feel like, in the last couple of years, at least, of moving some production stuff there. Trump said a couple of days ago he didn't like that. And then this morning said that it's a 25% tariff. Must be paid by Apple to the U.S. unless the phone is made in America.

Which, again, he just tweeted it on his blog. I keep calling his Truth Social his blog, which I actually, I have a side rant on that. I'll just talk about it here. But I think if you really think about it, that's what Truth Social is. Like one of the little mini mysteries of the whole.

Trump-Elon Musk partnership that I've been curious about for a year, like before the election, but even just when Musk threw himself in as all in on trying to get Trump elected, is The conflict between Trump owning his bespoke Twitter-like Truth Social social network and Moscow Famously, it's talking about $44 billion or $42 billion, having purchased Twitter and renamed it Act. and Trump having been previously one of the most famous users of Twitter.

How does that work? Has Elon ever said to him, like, hey, why don't you just shut that thing down and come back to Twitter? Or does he not say it? Does nobody talk about it? For all of the lickspittle, really, I think... already humiliating. But I think when this whole thing is over is going to make all these people look so bad. The lickspitalism of everybody that Trump has selected.

for the Trump 2.0 administration in every position and how he's a genius and it's all about him and they have these cabinet meetings where they just go around the table and say what a great job he's doing and he sits there and nods his head and all of that. None of those lick spittles are on True Social. You know, Kristi Noem isn't on True Social. She's on X. Pam Bondi, when she tweets or the Justice Department or whoever, they do it on Twitter or X, whatever you want to call it. But not Trump.

No. And I think if you think of it, and it doesn't seem to bother him, it does, I don't know, maybe somebody, if somebody mentions it to him, maybe he'll get on everybody's case and get little Marco Rubio to start posting on Truth Social. JD Vance, he doesn't post on True Social. The biggest lick spittle of them all. None of them do. But if you think of it as... If you think of it as his blog, It kind of all makes sense.

It's really Trump social. It's just his blog. The one and only person who posts there who matters is him. I don't even know who second place is. I have never once seen a news story. And I'm back to reading more political news than I was hoping to be by this point in his administration. I read political news all the time, and I see links to posts that so-and-so or the Justice Department or Doge or...

Somebody posts to Twitter over and over and over again. Happens all the time. I see links to things people post to Blue Sky now all the time. I see links to things people post on threads, maybe a little less frequently. But, you know, it's being used and I see in news stories, oh, here's somebody posted this to Threads or Blue Sky. I've never once seen anybody post anything to True Social other than one person.

which sort of makes it a blog. And if you go there, and I'm not recommending anybody go there, but, you know, when the President of the United States makes an announcement like, hey, I'm going to... impose a 25% tariff on India-made iPhone. I link to the original source. If you go there and just scroll down and look at the replies, they're blog replies. They're so much worse and so much more illiterate than Twitter replies, which is saying something. It's his block.

That's really interesting. I've not thought about it that way, but you're right. I've never seen another person soar. source there i also i have it open now because i was reading that thing and just every four seconds a little pop-up comes up in chrome saying i'm not authenticated to do that action I'm not doing any actions. I'm looking at the page. So it's got the same level of technical competence that X does now, I guess. Tim Cooks, I mean, I don't know what happens here.

if Trump doesn't get distracted by something else or forget about it or Cook can't do whatever he whispers into his ear to talk him down from these ledges, because this isn't going to happen. There is no possible scenario. I've tried to explain it, and I don't even think it's that complicated. story, you have to think about it a little bit deeper than the typical person on the street. The typical person on the street thinks, not crazily so, because I think for many

Common everyday objects, this is the explanation. Like, why are most t-shirts not made in the United States? because it's cheaper to make them outside the United States, because labor is cheaper, and it's cheaper to just make them in Vietnam or China. to South America somewhere, and ship them all to the United States than it would be to pay U.S. wages here. Now, you can buy USA-made t-shirts. Some companies make them, but they are a little bit more expensive.

So you can do it. They're just a little bit more expensive because labor is expensive. And people think, well, that must be the situation with the iPhone, too. It would make the iPhone more expensive because they'd have to pay people $20 an hour to...

put the screws in the iPhone instead of paying them four bucks an hour over in China. The problem is the screws are on the other side of the world, right? The strength of what Apple has built is that it's not just the production, although that is obviously a huge part of it, But it's all the little parts. Have you ever opened an iPhone? There's a zillion things in there.

Apple's really the only thing in recent time product-wise that I'm aware of that they've assembled in the U.S. has been the Mac Pro. famously the last and trump won tim cook went and showed it to him and The guys on Connected were like, you think that's your Mac Pro? Because I had a 2019 Mac Pro for a while. I was like, God, I hope not. But even that, right, an extremely low volume, very expensive product.

But there were reports even then that they had trouble getting some of the components they needed to Texas for the final assembly. Yeah, including stuff like screws, which sounds so simple. But it's not. At their scale, it's not. For every one of Mac Pro they make, how many millions of iPhones do they make? That ratio has to be totally bonkers. It's just impossible. It's just impossible. I think that the thing...

And even when Steve Jobs was alive, I remember there was a story. It was sadly towards the end of Jobs' life. I guess based on when he died, it must have been the first Obama administration. but that he and Obama were at some kind of fundraising dinner or something, and Obama had asked him, Why aren't you making...

more things here. And Jobs' explanation was, and Tim Cook has spoken about this too, about what we used to call in the U.S. VoTech training. Like when I was in high school, there were kids who took VoTech and had to take like regular history and english in a math class in the morning and then they would go to vo-tech and they would learn trade skills fixing cars or becoming a plumber in high school and

That in China, for decades, they've had vocational technical training like that for something that's more akin to engineering-level talent. Sort of like, I don't know, what's the... Oh, man. What's the two... there's different levels of nursing

Right. Yeah, you could be like a nurse practitioner, registered nurse, like that sort of thing. Right, like a registered nurse. Yeah, that's what my mom was. And it was sort of, I couldn't believe I could, yeah, like an RN is a higher level of education and is not.

Not quite the same as like a bachelor's degree, but it's sort of the equivalent of a bachelor's degree. And being like a nurse practitioner, it's still very, very skilled. And you go to real school and you're doing real medical things, but it's a little less. aspirational I don't know what the word is but that China has tens of millions of people with this skill set like

Sort of an engineer, but not quite an engineer. And then they'd go and do this incredibly intricate technical work that you really can't. do. I don't even know what some of these things are, but you can't really do them without a very high level of skill. That's true, too. I know in like the retro Mac community, there's a big movement right now. People are recreating parts that you can't.

get anymore and so you can go out and buy like a remade like a brand new rebuilt se30 board i just linked to one the other day someone's rebuilding the macintosh plus and part of that is a response to, like, these parts are hard to come by, that everything's old, but within those conversations, like, if you read through those forum posts,

Every single time the person with the project idea runs into this problem. Like, oh, I want to get these boards made and sell them on my side or give them to my friends. It's like, You run into the problem of there's basically one company in the United States that does that kind of work. And they have a ceiling to what they can do. And if you go past that ceiling, you've got to go overseas. And again, think about a retro hobbyist trying to rebuild the SC-30.

That's a small project made with love, and they may not ever make their money back. The iPhone is such a different universe than that. I mean, I think about projects I've done over the years and the sort of logistics that go into them. I can't even imagine what it takes to build an iPhone, let alone hundreds of millions of them. And they're out on time basically every year. That machinery and those muscles have been built over decades.

And you can't just pick it up and move it because the guy in charge at the White House wants you to. It was fun, and I think... the bigger thing isn't even the skill set, right? But that is a huge factor. And to have that skill set, and want to take a job for a relatively low wage. The wages in China aren't as low as people think they are anymore.

But the people putting iPhones together at Foxconn in China are still making wages that wouldn't give you a living here. And so you can say, well, you know, $20 an hour, $30 an hour, something like that. And then the iPhone price would go up a little bit. You can't find people that skilled here in the U.S. who would want to spend eight hours a day

Putting tiny screws into an iPhone. And the last time I mentioned that Ben Thompson... called me out on it and laughed and said eight hours a day, because if you get the job in China, you're working 12 hours a day. And obviously, in the United States, we have different labor laws, but to run a factory 24 hours a day would take three shifts, not two, which would also increase the cost. And it's not just...

1.5 as many employees to go from two shifts to three. But then there's the whole trade-off inefficiency of having, well, at eight in the morning every day, everybody leaves and a new crew comes in and it's downtime.

But I think the biggest thing to me is just the fundamental scale of the whole thing. And that exercise I did a month or so ago with Ryan Jones, when they first It came out with the story that Apple was trying to hurry up and fly as many iPhones out of India as possible ahead of the worldwide tariff. And, well, how many iPhones fit on a plane? And we did the math based on the weight of the plane, or Ryan Jones did really originally, and then I just stole it. But it's really, really...

Eye-opening. I think it's big, big numbers like hundreds of millions of phones or 100,000, 150,000 phones a day. They're very hard to imagine, but when you think of filling six jumbo jets, the biggest jet Boeing makes that are entirely used for shipping freight, and fill them... from the entire cargo capacity with brand new iPhones and give the benefit of the doubt to how small the packaging is for the iPhone. That's 12 days of inventory in the United States.

Mm-hmm. On a typical April, May this quarter, Apple sells around 150,000 iPhones per day in the U.S. So if they were making them all here, and again, that's not even accounting for the rush in September when they do pre-orders for new ones. It's not an even... demand year-round. Right. $150,000 a day. That's $6,250 per hour. Gosh, so that's 104 iPhones a minute they need to produce. And now they're doing that somewhere right now, mostly in China. 104 iPhones a minute are being assembled.

just to meet the demand in the United States. That's not to meet the demand everywhere else in China and Japan and Europe and everywhere else they sell them, right? So I don't know how many, you could do the math on how many more they're making elsewhere. But to meet Trump's demand, Of U.S. sold iPhones being made in America, they'd have to figure out a way to produce 104 of them every minute. 24 hours a day, 365 days a year. So if they only run the plant for two shifts instead of three...

it goes up even more. It would have to be like 150 of them an hour. The scale of the operation... It's just unfathomably. I mean, so even if you could just concede for the sake of argument that Apple could hire enough Americans who would want to do the work and have the skills or could be taught the skills to do the work. the infrastructure build out to build out that sort of capability. It would...

In a best case scenario, it would take years. I mean, what kind of a maniac would start laying out that investment now, knowing how erratic Trump's tariff policies have been just for the last, what?

six weeks five weeks i don't know god it's been the longest month like i cannot believe it's still may that was one thing that was so interesting with the chips act and companies like tsmc coming to arizona right where they're going to build products there and there was reporting I think earlier this year or late last year about sort of the conflict within TSMC between what they're used to overseas and why American workers

are used to right and you can say things about both sides of yes the conditions and working hours should be better overseas and maybe some americans we've got it too soft here whatever but there's that conflict there right and that TSMC, they're building legacy products in Arizona, I think is what the reporting has been. And probably not the scale of the iPhone, right? And TSMC also, like...

They control so much of it, right? So much of that is in-house, where Apple is extremely dependent on a bunch of different vendors right and it's not as simple as sand comes in one end and like a15s come out the other right they've got vendors and everything too But the iPhone has all of these different components from all of these different companies.

It's just the scale. It's just so different. I think I remember that story. It was a good story. I'll have to see if I can find that for the show notes. But the anecdote, which I'll butcher a little from memory, was basically that in Taiwan, If an engineer who's responsible for a certain critical machine gets a call at one in the morning that the machine is down, he just... He or she just gets out of bed and puts their pants on and goes in to fix it immediately.

And in the U.S., it would be like, oh, I'll come in early tomorrow morning. Which I think most people say, well, that's a healthy life. That's pretty reasonable. Instead of coming in at 9, come in at 7 in the morning because the critical machine is down. But in Taiwan, it's not like somebody's barking at them. It's just the expectation. Like, oh, that machine's down. All right, I'll be right in at one, two, whatever time of day. Yeah.

So I don't know. And I guess the other factor with this, too, is Trump is so dumb. He's so ignorant on this issue. He really is. I don't know anybody listening who's a Trump fan who still listens to my show. I mean, thank you, number one, for having an open mind.

Two, on this tariff issue, he's just plainly wrong and dumb. And he knows, he kind of knows it too, because, and I've called it out at least a week ago, where his whole rhetoric throughout the whole election is this nonsense that tariffs are paid by the countries that you impose them on.

that a tariff imposed on Indian-made iPhones would be paid by India to the United States, and that China pays tariffs on Chinese-made goods. But here's Trump last week telling Walmart that they should eat the tariffs. before they raised prices on everything in their stores. And now here today, he even said in his stupid little post that this is a 25% tariff that Apple will have to pay.

i mean which is it you can't have it both ways okay no you can't i was talking to a friend of mine a couple of weeks ago who he owns a product company and some of their metal fixtures for their product are made overseas. He told me literally no one in the United States can make this part that we need. Now their product is assembled in America. A lot of the other parts come from U.S. companies, but this specific metal piece has to come from China.

And this was back when it was like, whatever it was, 100-something percent era. He was like, we're going to go out of business because this is their main product. They can't make it another way. He's like, we're going to have to scale down because this decision destroys my business. It's like a guy with a small business. He like operates out of his house, right? He's doing what you and I do, but with real kind of products and not just work. it's like you're hurting so many people

A lot of people who voted for him, but not so many people because it's not China. It's not India. It's not even Walmart, right? Walmart got yelled at by Trump because they were going to pass it along to their consumer. and they are going to pass it along and that's the truth too it's not Apple who's going to pay these tariffs I mean some part of it yeah but ultimately it's going to cause prices to go up that's I mean, there's no other way about it. And it really is just simple arithmetic.

There was that story that the iPhone costs are going to go up and Apple is going to do some ninja PR work and be like, oh, try not to blame the tariffs. Because they don't want to get that phone call right. And in a way... Apple's position with the tariffs and the whole global anxiety in the system right now is much more precarious than somebody like Walmart or Target or Home Depot or these big box stores.

Their margins are a lot lower than Apple's, but as long as the products show up to their warehouses, they can still sell them, right? They're going to pass the costs on to the consumer. But if Apple's in a situation where... They can't bring their phones in. That's why they were rushing them out of India, to your point a second ago, right? It's why today I saw a thing at lunch of Apple has a short-term increase on trade-in values on phones.

Yeah, yeah. You can't tell me those two stories aren't at least a little bit late. I saw that. Somebody else sent that to me and said that there's speculation that it's sort of played together, even just recycled material and stuff. I'm sure you've seen this. I definitely have seen this in my email, but also just in friends. people like consumer spending has been pushed forward. I think you and Ben have talked about this too, right?

The Apple stores are really busy right now. People are buying phones who wouldn't wait for the fall because there's going to be a new one. Those people are going to buy a new phone unless the price doubles. But people who are like, I'm not really due for an upgrade yet. Maybe next year, right? People like my wife, Mary, she basically upgrades her phone when she feels like the camera is no good. And usually that's every four years. Sometimes a little bit longer.

It's that sort of consumer that I've been pushed forward by this stuff. It's because of that anxiety in the system. The anxiety is totally rational, right? Where you can guarantee yourself today that if you walk into an Apple store, you can buy today's iPhone 16, whatever model.

at today's price and you know how good that camera is and you don't know how much better the iphone 17 model is going to be but the other thing is in the last few years we kind of even casual users like both of our watches kind of have the sense of how incremental one year difference would make camera quality wise right you're not going to get screwed you're not going to be like oh my god i really made the dumbest mistake of my life buying an iphone

16 in 2025, right? Because look at the iPhone 17. Do you want to gamble that the price of the phone won't go from $1,200 to $1,400 or $1,500? And knowing that that incremental increase in the quality of the device is to most consumers, not worth $200, $300, $400 in price. It's not to them. That's how price and demand work. Right? I mean, it's a very simple concept.

But people who are like, so why take the chance? Maybe the iPhones will stay at the same price this year. Maybe they'll only go up $100 per tier. But maybe more. Who knows? And Trump certainly isn't calming anybody's anxieties that the tariffs are going to get more predictable. It's bananas. Like I said, I wouldn't trade Tim Cook's problems to a monkey on a rock.

Or Jaws, really, because Jaws is the one who might be stuck trying to figure out the narrative to explain, oh, these prices are higher, but look at how much more you get. It's worth it. The last several years, there's this very funny trope in Apple's iPhone keynotes to me. The regular iPhone is announced, and it's someplace beautiful and well-lit.

And then Jaws is staying there at nighttime to introduce the pro phone. It's just very, every year it's like, I have a little bet with myself. Are they going to still do it? And they always do. Oh, I bet they do again. Hyatt rants in the daytime for the non-pro phones. But, you know, it's going to be bad, like, when she's also in the dark, right? Like, the whole iPhone, you know, starts, and it's all at night, and it's, like, gloomy looking. Hey, guys. Okay.

They've set the mood early. Yeah, that might be what gets Jaws out of nighttime mode. He's just in a pitch black room. Hey, the phone's really expensive. Sorry. I forget if we talked about this on stage. in one of the recent years or not because of the on-stage shows at WWDC, not iPhone, but... Jaws is a morning person. He likes to wake up very early in the morning, and I guess it runs on Tim Cook's schedule. So he hates shooting at night.

But he likes the look of it, so they do it. But they actually do those things at night. Pro is nighttime, and non-pro is daytime. All right. The bonus round question. Fortnite, back in the App Store. Yeah. What's your take? I cannot believe it's been five years since that started. I think I was reading the Verges coverage of it when, like, oh, it's back. It was like, it's been gone since 2020. That has to be a typo. Not a typo. It's true. It's been five years.

There was a lot of conversation about how the injunction that has opened the door to web payment processing on the App Store. That doesn't really address can Fortnite come back because they did break. their developer agreement, right? That's effectively the contract between Apple and a third-party developer. and

They submitted it, and then Apple sat on it, and they had to resubmit it for some technical reasons, it seemed like. But then the judge was like, you guys got to deal with this, or you have to come see me next week. And that seemed to get it over the edge. I think ultimately it's good that it's back on the store. I think it makes the iPhone a better platform to have one of the world's most popular games available for it, right? And I think they said this on ATP. It's not original to me, but...

Apple was making no money from Fortnite for the last five years. And now at least they're going to make some of it. There will be some people... who clicked the in-app purchase, right? If anything, I was thinking about this in context of my own family because I've got two teenagers, they have iPhones. We have the thing set up where they have to ask permission to download an app. Even if it's just that mechanism being a requirement in some family setup,

Apple's going to make something from Fortnite. And you have the most popular thing back on your phone. And it takes a little bit of the edge off you looking like a jerk. And so... I think it's good that it's back. Who knows what the future brings with this stuff. But I do wish Apple had just approved it. I don't like that it took them... whatever it was, close to a week, and a judge telling them, figure this out amongst yourselves. It should not have to come to that.

This is where Apple's willingness to keep its mouth shut pays off. They never said anything about Fortnite. The only comment we've seen from Apple about it during the whole, will they, won't they, how's this going to work out? was the letter Apple's lawyer sent to Epic's lawyers that Epic put on Twitter. But I'm sure Apple thought, knowing that Epic has done that in the past, wrote the letter. expecting it to be posted publicly. But without making any public statements, no comments,

I often don't ask for comment, but I did right from the first day when Tim Sweeney said that Fortnite would be coming back, which was bullshit, right? He didn't know. Got no comment at this time. If anything changes, we'll let you know. But they didn't really let me know when anything changes. I'm not a lawyer, but I've followed this closely. I'm pretty sure Apple was on perfectly firm legal ground to not reinstate.

Epic's U.S. developer account. And it was adjudicated in the first trial in 2021 with Judge Yvonne Gonzalez Rogers. where the fact that they had revoked it and there was a brief time period And, you know, they're a big company. I'm not even saying that it's shady. But Epic has multiple developer accounts. Like there's the one that Fortnite, the game is published through, is different than the developer account for their...

Game Toolkit. Is it Unreal or the other one that Epic does? I think it's Unreal. Yeah, so let's say it's Unreal, but that's a different developer account, and Apple... pulled all of them, revoked all of them. So for at least a brief time, it was going to seem as though nobody who's making a game with Unreal Engine for the Mac would even be able to get an updated version of Unreal Engine.

Briefly, what she had ruled is it was perfectly fine that because of the blatant violation of the App Store guidelines that the Fortnite developer account was revoked, but Apple, she forced them to reinstate the other. And then ultimately when that trial was over, it just stood. It stood as, yes, this was perfectly legit for Apple to kick Fortnite out of the App Store.

And if only Apple had ever conceded on the most blatant anti-steering policy they have, the link-outs and the just being able to tell users what to do. Right? Which is just bananas. It's not just that the Kindle app couldn't put get book buttons next to the book in the iOS Kindle app. They couldn't even put text that says Due to App Store policies, we're not permitted to sell books within this app. To get a Kindle book, visit Amazon.com slash Kindle in any browser, including on this phone.

buy them and they will sink here. They couldn't even tell users that. That was one of the rules, which is bananas. I mean, it's just, it's indefensible. And if they had just conceded on that point, there wouldn't have been anything left for Epic to appeal. It was Epic appealing on linkouts and informing users of outside the app deals.

that this whole thing was on. So if they had conceded that point a few years ago, they would have already had a clean win. And instead, with this one remaining issue, and which her original injunction... clearly what they claim was complying did not comply with her injunction. I mean, that was one part where I really questioned my...

Well, I'm not a lawyer, you know, and maybe if I were, I would get it. Because I just remember thinking at the time when Apple came out with all of the crazy scare sheets, and especially the whole scheme of taking 27% on it. of the transit. All right, you can link to the web, but you've got to use a screen that looks exactly like this.

that is really scary looking and full of warnings. And then when they do it, you have to track the user for seven days and anything they purchase, whether it's on their iPhone or any other device, After they've gone from your iPhone app to the website for seven days, you'll owe us a 27% commission on, and to make sure that you're paying it, you're going to have to open your company's books to our auditors at our request.

I mean, the idea that that complied with the plain language of her injunction, which was basically what Apple's now doing. Like, you have to let people put links and buttons that link out to the web and tell people about Office. It really made me question. I really thought, well, Apple's smart and they've got good lawyers. They must know something I don't because I don't see the plane. I don't see it in this injunction. And one... I think a really, really great part of US law is that

If it's not written down in the injunction or the order, it's not real. There shouldn't and couldn't, and it turns out there weren't. It's not like... Okay, her injunction makes it seem like they have to put link-out buttons and allow apps to inform users of deals outside the web.

But maybe in her chambers, she told Apple's lawyers, yeah, sure, if you want to make it really hard and impossible, sure, you could do that. I just kind of had to put that down. That's not how U.S. law works. If it's not an injunction, it's not. real. And the injunction made it seem like they have to permit link-outs. And it turns out they did. And if they had just conceded that, they would have won on every point.

But again, was it worth it anyway? Like you said, at this point, five years later, what's the point of keeping this incredibly popular game with ongoing enthusiasm out of the story? Yeah, it makes the product worse that that game's not there, right? I mean, so much of the scare sheet stuff, I mean... It all felt so petty. I remember when the design of that was announced. I think it was announced in developer documentation probably on a Friday.

And I remember scrolling through it and being like, this can't actually be what they're doing. I mean, it looked ridiculous. And the tracking and the auditing, all of it was so over the top. And to her credit, the judge saw through it. I was like, this is not what I told you to do. And if Apple had done the right thing then... They could have, from their perspective, limited the damage to a degree. But now...

Because they did that because they tried to hold on to the control, they've lost even more of it. And it's so frustrating as an observer and as someone who likes their products. Y'all are fighting over this in the grand scheme of things. It's not that big of a deal because when you open it up to the web, like there's been a lot of evidence from companies like Revenue Cat and Superwall. People still are going through the app store. Like you actually lose some conversion rate.

going to the web because people maybe aren't familiar with it Or they go to the web and they get distracted and they go somewhere else or their credit card fails. Or it doesn't get autofilled right or it autofills the wrong card. Because so much autofill works in so many places. Where now if you have to look it up and what is the expiration date or the magic CBV numbers on this card, I forget. And you're like, ah, forget it. And so like you said, you know, you lose, I don't know.

Some percentage of sales that you otherwise would have gotten in the app store. It's not all app store money is going to go away. I think most will. I really don't. I know Marco said, I wish I had the exact quote, but on the last ATP, that, all right, now this is the law in the U.S., and let's say it stands in Apple's emergency injunction to get this revoked so they can take the rule back. doesn't happen and that these link-outs continue exactly as they are in the U.S.

Three months from now, six months from now, when Apple reports their services revenue, is there any? Are you going to be able to see a little downward tick? I don't think so. Or if it is, it'll be like, I don't know, like one pixel in one of the Snell's charts. That's right. We'll have to overlay Snell's charts exactly in Photoshop and see. They're going to continue making money. The idea that everybody's going to abandon an app purchase when it's offered alongside.

for a 20% discount or whatever they're offering is just as, wrong-headedly zealotrous as Apple's obstinacy and even permitting it in the first place. The idea that the whole world is looking to get away of consumers are looking to get away from in-app purchases bananas they're not they love in-app purchase and it's one of the strongest legs apple has to stand on is it is a very consumer friendly purchasing system. I actually think, did you see the dual purchase thing Fortnite offered?

i did yes super interesting because you know riley with delta like buried it in a support screen which is just very funny to me but yeah it's it's on equal footing now they are leveraging the fact that they have other games and other platforms and they have a V-Bucks system which I'm too old to really understand but like the beauty of that screenshot is like it's competition right it's

it's you have the consumer i have two choices there's various pros and cons to each one and Apple could, if they chose to engage in competition here, they could strengthen their position with some developers by making in-app purchase even better. They could do something with the commission. They already do offer a lot of flexibility when it comes to subscription and one-time payments and different trial links. There's a lot of tools there in App Store Connect for developers to use.

If they were forced to contend with the open web and companies like Stripe and RevenueCat and others building tools, it would make their own payment system better. That's how competition generally works. And because they've never had that on the App Store, like they've never... And I had to. Yeah. And I, sorry, I don't, I, you know, who knows? Maybe I'm wrong. Maybe Apple knows something I don't and services revenue will drop.

noticeably because of this. I don't think so, and I certainly don't think so after Apple. adjusts its strategies and commission rates and ideas. If I were in charge of the service revenue at Apple, I would be much more worried about the government versus Google and that $30 billion or whatever it is potentially going away.

Well, but I don't think that's not going to vanish, though. Even if it's the most adverse judgment against Google and they're not allowed to pay for not just default placement but any search engine integration, then Apple will switch to something that has some ads that make some number of tens of billions of dollars. I mean, it's not all going to go.

I think the most interesting thing about the, I'm going to try to make it the album art for this chapter in the show so people can just look and see it. But this screenshot that Epic has of what their payment flow looks like. It's, you know, to purchase 2,800 V-Bucks for $23. And there's two buttons. They're the same size. It says choose how to pay. Epic Store has their brand name and their logo, and in a small print it says, earn 20%, $4.60 back in Epic Rewards. So you get Epic Rewards.

And the other button. Back to I.O. In all lowercase letters. In app purchase. And then there's a cancel button underneath. Now, spelling in-app purchase in all lowercase letters and not putting an Apple logo there to show that you're using the Apple system Epic clearly thinks they're steering people towards the epic storm, and maybe it is a little. I think, and it's not, it really just, it's like my cynical mind.

I don't know. I don't want epic rewards. That seems like a scam and a hassle. But I'm not a gamer, so maybe people who do play do, they know what epic rewards are and they want them. But I want cash back, not points, right? Points suck. Like, that's a trap. So I'm kind of thinking, even if I'm a casual user, I'd be... Very tempted to just hit in-app purchase here, or at least try it and see what pops up, and then it's the familiar double click.

side button and then i've got it and i'm like i don't know what the other thing is i think what's funny about this is that Epic's screen for this is way more generous to in-app purchase than Apple's scare sheet link-out screens from their original design were to link-out. Yeah. I think that's, it's on equal footing, right? You're not going through a screen that's like, Hey, you're, I mean, basically like your identity may get stolen. They did the thing, the grossest thing to me about it.

is that they use the developer's name instead of the app name. In quotes. In quotes, right. And there's lots of companies that have, like, when I made Vesper, we were QBranch LLC, which is a funny little in-joke for the James Bond fans of the world. But there are surely...

many, many, many Vesper users who had no idea that the company behind Vesper was named QBranch. So all of a sudden, if we had had an app purchase at the time and it says the company QBranch LLC wants to charge your credit card on their own, People would be like, what the fuck is that? I'm trying to buy, you know, whatever, upgrade storage for Vesper. And that was a company name.

What if you had done it as John Gruber, right? Then does it say John Gruber is going to know what to do after this? And that was one of the embarrassing things that came out in the latest injunction that required this, you know, some of the evidence that Yvonne Gonzalez Rogers included. included the Slack

transcripts from Apple employees saying, oh, you know, somebody came up with the idea of putting it as the developer's name and somebody else was like, oh, yeah, the execs are going to love that. That's scary. And it's like, gross. Also, Slack is like one of the worst things that's ever happened to big companies.

Because it encourages, it's like we said before about chat, it encourages a level of flippancy that I don't think email encourages or more formal systems. I don't know that that would have been... put into writing using another system of tickets or in-person conversation. And I think people don't think about Slack being like,

Slack logs are stored if you pay for it. Oh, this is going to show up in court. Like email, you know not to put the crimes in the email. Or even just the embarrassments, right? Even if you don't think it's illegal. It's not illegal to make them put the developer's name in scare quotes. Sure does look bad.

I mean, even at Relay, like, between Mike Hurley and myself, like, we run Relay on Slack. We got, like, 50 people in there. But, like, if it's, like, decision-making time, we're on the phone, right? Because it's like, we're going to talk through this. We're going to hear how we actually feel about it. A way the text doesn't come across. Yeah, and it's not that you and Mike Hurley are criming, right? No crimes, I promise.

I really believe that, Stephen. I truly believe it. But even so, there are times where it's just more natural to spitball ideas without a permanent record of it. It's why Signal and WhatsApp, the disappearing messages, are so popular. And it's not just about talking about sex or talking about crimes or talking about sex crimes. There are just certain things that people are more comfortable knowing that this is not permanent.

Yeah, the thing, I mean, the slack messages were definitely gross. The angle to it that keeps rattling around in my head is like that bit about, oh, they're going to love it, right? That if someone's boss is going to be pleased with them because of this is like... What that says about the culture, at least in that corner of the company, Apple's a huge place. We both know a lot of great people there. I've talked to employees of Apple who don't like how this is going down.

But seeing the part of the culture that liked this, or that was pursuing this, or at least doing it because someone above them wanted them to. That's not good. It doesn't jive with the apple that resides in my head all the time. And it ties in, and I don't think he was talking about the App Store. I don't even think he mentioned the App Store, but I linked to a Benedict Evans Threads post of all things. Like I said, sometimes things on Threads come in the news, but Benedict Evans.

had a great little threads thread which is awkward to say that I linked to but I that you know Apple has great customer service and tries to make customers happy. And the same company is famous for squeezing their suppliers.

every step of the way. Like we were talking about just obtaining enough screws or metal parts to put the computers together. And that somehow they lost sight of the fact that third-party software developers are both customers and suppliers depending on how you look at them and not really either they're just different but that it's a different sort of relationship but that they've wound up treating them just like suppliers and

Here we are. And I got some pushback from some people at Apple that, oh, no, we don't. And again, it comes back to what I said to you earlier, where it doesn't matter. If you're at Apple and you really think it's true that, no, we treat our third-party developers great, wait till you see what we have to announce next month at WWDC, we've got all this blah, blah, blah.

But the truth is that's what developers feel right now. The developer sentiment towards Apple has never been worse. And I've been following this. I've been part of the community for decades at this point. And it's never been worse. And that's a real problem for Apple, whether they're actually wronging developers or not.

that the perception is more important than the actual reality and that they should be bending over backwards to repair those relationships and that there is And again, maybe it's the perfect end of the episode, but another thing, Johnny, I've said in that interview with Patrick Collison, and I have to believe it was Something of a very subtle jibe at where Apple has gone in the last 15 years is

The belief that trying to assign a number to everything that actually has value so that you can say six is greater than four. So go with the one that's six. but that there are many parts of design and relationships that you cannot assign a number to, right? How much is the Apple logo worth? You can't put a dollar sign on it. There's no price that anybody could pay to buy the Apple logo from Apple. It has tremendous value, but you cannot put a dollar value on it.

And developer relationships are like that. And Apple has squandered so much goodwill. And you cannot put a dollar amount on it. There's no way to say it's $4.3 billion worth of developer goodwill has been squandered over the last five years because of the App Store policies and commissions or something. You can't do it. But it is valuable. And I do think, I really do, I feel it in my bones. I mean, but you have to go with a bones feeling.

They've squandered more developer goodwill from companies big and small down to individuals and up to their biggest peers in the industry. They've squandered more developer goodwill and enthusiasm for creating unique and exclusive software for Apple's platforms than they have squeezed out of the app store. by being... to borrow Princess Leia's

I'll probably butcher this quote too, but the tighter you squeeze, the more systems will slip through your fingers. Look at Vision OS. There's lots of complicated reasons that has not taken off as a development platform. But... We talk especially about the big companies, right? It's why would we build for another Apple platform if the deal is just the same? And look at what you did when your last thing really took off. Look at how you've...

Look at how you've wielded that power over the rest of us. So why would we help you gain another foothold like that in a new field? I mean, Zuckerberg talks about it flatly in such terms. And you could say, well, that's competition, not anti-competition. But at a certain level, they blur into each other. And you really can squeeze something so hard that it breaks.

Yeah, absolutely. And I think parts of these various concerns we have at Apple currently, parts of them are closer to breaking than others. Some will be easier to fix than others. But the development sentiment has been declining for so long it's more than just say a few days before wbc phil schiller should sit down with somebody like hey look we're doing 90 10 across the board

starting today, you're going to make 20% more money. That would go a long way to a lot of developers. So for a lot of developers, it is about the money, but it's also about respect and the tooling and all these other things it's very complicated and they've got to unwind a bunch of things to fix it and

Yeah, all of a sudden it would just feel like it's pointing in a different direction. It would make an instantaneous... difference to switch to 85-15 or 90-10 or some combination or something like that. and it would take a while for those financial differences to add up, but instantly it would change the direction that everybody sees Apple pointing in. So anyway, that's my ultimate... I mean, I'm not holding my breath for thoughts on the App Store.

before or after WWDC, but that would be my hope. Yeah, and it's the time, right? It's the time where you have developer attention. Several times over the last few years, they've taken the week before DubDub to announce something, right? Yeah, yeah. Actually, the App Store small business program was an exception to that. That was announced in the fall. I had to look that up the other day.

But there have been several times where they've used that sort of like what, going back to IO, they did it with Android. They were going to do Android the week before. They have an opportunity when people are paying attention. And if you want developers to be excited about say embracing your redesign of your os's or embracing new technology or a new platform and the foundation is bad

You're never going to get the traction you want. And so they have an opportunity to address some of these things, but I'm not holding my breath either.

Right, and it's the sort of thing, too, that would, in my opinion, probably play better as a pre-WWDC announcement, just because then they don't have to put it in the keynote, and it's like, eh, the keynote's supposed to be all celebratory, and it's all... sunshine and and good vibes and there's no way to talk about reducing the commission in the app store without it feeling like a concession i mean there's apple's really good at messaging and they'd be really good at

Phil or Joswiak or whoever would get the job to do the sit-down about it. There's a way to do it where it doesn't seem like you're conceding. It's the famous Apple way where it drives people who don't like the company's products nuts. where, and Jobs was the best at it, is everybody else is doing X, Apple says we're not going to do X, and then the next year Apple does X, but they act like they invented it, right? Yeah.

Like somehow come up with a way to make a 90-10 split feel like a grand innovation in online payment. If anybody can do it, it's Apple. And it'll drive the haters crazy, right? It will, but it would make them competitive, right? It would make them competitive with the web, and they would...

I think, retain more business than they will otherwise. So many of these things are just, they seem so obvious to those of us on the outside, right? All of us for years have been beating the drum about some of these issues. And that can be frustrating over time of like, okay, like...

It's right there. Yeah, it's like they've stuck to principles that there's no advantage to sticking to, whether they're right or wrong about them, right? And it's like the buying books from the Kindle app instead of in the Kindle app or whatever. But the fact that you weren't able to do any of it or even know how to do it, how did they not see that as?

This is the example that should have made them say, you know what, we need to rethink a lot of these policies. The fact that there is, under the current policies, there's no way to do this. It's just confusing as hell to a normal user. Normal users, when they can't do something that they think they're supposed to be able to do, and I think a normal user who figures out that they can read Kindle e-book... in an app called Kindle on their iPhone and iPad.

probably thinks there's probably a way that I can buy books here too, right? Because they sell books and that's where I get the books that I am reading somewhere on Kindle. And when they can't figure out how to do it, they blame a lot of them. blame themselves. I'm not good at computers. I can't figure it out. I don't know what the hell's going on here. Or maybe they blame Amazon unfairly and think Amazon's just bad at design.

Boy, Amazon should just do what the Apple Books app does. Right. Yeah, come on, Amazon. Get some buttons in there. Right? They really like losing money. They can't sell books. That obvious fact that casual users, millions of them, I mean, Kindle is so popular, surely it's tens of millions. I guarantee it. Tens of millions. of joint customers of Apple and Amazon who are trying to use the Kindle on iOS platform.

have surely blamed themselves for not being able to figure out how to buy books. And that's the exact sort of, I can't figure out how to do X. That's the whole reason Apple Computer exists. It's solving that problem for people. I can't figure out how to print. Well, get a Macintosh. It's easy to print. Yeah. Connect a cable. I can't figure out how to get on the web on my phone. Get an iPhone. It's Safari. It looks just like the Safari on your computer if you use a Mac.

Solving those problems. I can't figure out the secret codes to make text italic. No, it's WYSIWYG. Just select the text and go up to the menu and choose italic, and you'll see it italic right on your screen. All of those problems, that's... Apple's real DNA. I mean, I know it sounds corny, but that's what's driven their success. And the idea that they set up a system where tens of millions of Kindle users probably blamed themselves for the fact that there weren't get book items or buttons for...

15 friggin years 16 years in the app fundamentally shows it's broken. Whatever they're thinking inside Apple for all those years where they hung on to it, thinking, well, the hell with Amazon. They're a big company. They don't let our app onto their Kindle devices. All true, right? It's for the user. If it was user first, there would have been getbook buttons in 2010 or 2011 or whenever. Or something as simple as if you want a refund from a purchase in the app store.

And you find the developer's email or you hit the button in their app to contact them. And the developers can't do that. That is on the Apple side of things. And... instead of blaming themselves, they're going to blame the developers. No, you're just, you rip me off, right? And you end up with a one-star review in the App Store because

Maybe the refund request was completely valid. Maybe they misunderstood or they didn't mean to purchase and they did or the trial ran out and they didn't realize it. There's lots of legitimate reasons for refunds. But Apple's... kept that on their side of the deal. You and I know developers, indie developers, who are just like regular crafts people or people who run a cafe or something, you know, and it's like if you go into your corner cafe...

And all they have, you know, and somehow you've prepaid, but all they have is caffeinated coffee, but you can't drink caffeinated coffee. Any normal place run by a small business owner would be like, oh, let me give your money back. You know, I'm not taking your money. I know developers who people think the app is going to print PDFs upside down, and it turns out the app doesn't do that.

Well, then they'll just give the, oh, I'm sorry you thought that it did that. Here, take your money back. Sorry for the confusion. Whatever the confusion is. The rest of the world works, and the rest of the world is fine, it turns out, in this regard. Yeah. You know, that's it. Again, they've got tariffs to worry about, but it's not on the App Store. So, yeah. All right. Oh, man. Let's not go there. Yeah, that's not putting any ideas.

Stephen Hackett, thank you for your time. Thank you for joining the show. We covered a lot. Again, 512pixels.net, your website, but also, I mean, you're like the co-founder of, what's your title at Relay? Yeah, co-founder at Relay. I host Connected and Mac Power users over there each and every week. It would be kind of bizarre if there's anybody out there listening to this show who's not familiar with your podcasting work, but it's, you know, you got to give a shout out. Thanks, Stephen.